It is essential for parents to teach children the value of money as early as possible, a children’s psychotherapist has warned.

On Newstalk Breakfast, psychotherapist Richard Hogan said children who are just handed pocket money without earning it will never appreciate it or value what they buy with it.

He said children need to know that earning money is hard and that a lot of effort goes into getting everything you provide for them.

“What's really important is instilling in them that you don't just get that money,” he said.

“That's a really important thing because they don't value it and then, when they use that money to buy stuff, they don't value what they buy.

“So with your children, particularly your adolescents, it’s about chores.

“Of course, at a certain age, they might not be able to work but I would say … they have to do something to earn that money, like chores around the house or a bit of babysitting or tidying up or the dishwasher.”

Money for Nothing

Dr Hogan said he still has the Beatles album he bought with his first paycheck in the 1980s.

“It is a bit light-hearted with my own kids but it's important that they see the value of things,” he said.

“You know yourself, if you get money for nothing, as the old song goes, you don't really appreciate what you buy with it, what you spend it on and what you get.”

Child counting pocket money. Image: Alliance / Alamy Stock Photo

Dr Hogan said children who are handed money for nothing can end up expecting that they will always get handouts.

“They don't understand how hard it is to make it,” he said.

“I mean, it's very hard to make money, it's very hard to earn money and then, the money they get, they don't realize that you were taxed on it to get it.

“It's really important for them to understand that money doesn't come easily and that you have to earn it.

“You have to go out and work for it.”

Value of hard work

He said you should also help them understand that when they go on holiday or to an event, “that actually required a lot of work to make that happen”.

“That way, they're not going out there with an expectancy that things just land in your lap and thinking life is like butter, you just go out there and money just lands in your lap,” he said.

Dr Hogan said the rise of digital currency has made it even more important to teach children the value of work – because when you send them money on Revolut, they have even less appreciation for what it is.

“They will start to appreciate nothing, they’ll start to expect it and once a child develops that expectancy, it's hard to crack that,” he said.

“So, it's about having a good culture around money and teaching them the value of money.

“It's such an important thing.”

He noted that parents should be teaching their children about money early on in life – and certainly by the time they are teenagers.

You can listen back here: